Two exchange officials jailed in South Korea for faking volume

Two officials of cryptocurrency exchange Komid have been jailed in South Korea for “faking volume,” according to reports by local publication blockinpress.

Komid’s CEO, Mr Choi, received a three-year sentence, while another leading figure at the exchange was sent to jail for two years for fraud, embezzlement, and misconduct.

The exchange reportedly faked five million transactions with the intention of inflating volume. The scheme, which also saw the use of an algorithmic bot, earned the individuals $45 million.

The judge for the case is quoted as saying: “Choi has committed fraud for a countless number of victims for a long period of time…. Furthermore, he holds the financial authorities responsible for failing to keep track of the industry better.”

“He used the point balance, which Choi entered as false, in the actual password currency transaction,” the judge added. “Choi repeated the order artificially and fooled investors as if transactions were happening smoothly.”

Komid aren’t the first Korean exchange to be accused of falsifying volume on their platform. The nation’s largest exchange, Bithumb, denied reports that claimed up to 94% of their volume was faked.

“Bithumb is doing nothing to inflate trading volume,” an unnamed company representative told Forbes. “Bithumb is not selling mining-based coin. Bithumb is trying to get more customers by providing various promotions just like any other company in the world as a normal business.”

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